Coastal insurance reform bills begin moving through state Legislature

View full size(The Associated Press)Three coastal insurance bills started moving through committee Wednesday, but legislation to extend tax breaks to insurers who write in coastal areas ran into opposition.MONTGOMERY, Ala. -- Two coastal insurance overhauls breezed through legislative committees Wednesday, but another bill was delayed after bitter debate.

Under bills that passed committees in the House and the Senate, more companies known as surplus insurers -- whose rates and solvency are not backed by the state -- could begin writing policies in Alabama.

The idea is to boost competition in the coastal market, which could lower premiums and widen availability, according to the bills' sponsors, Rep. Steve McMillan, R-Gulf Shores, and Sen. Trip Pittman, R-Montrose.

A McMillan-sponsored bill that cleared the House Banking and Insurance Committee would establish a process for consumers and insurers to settle disputes, as well as require insurers to disclose more information about their rates and profitability.

Those bills, which drew no dissent, can now go before the full House or Senate.

But a bill from Sen. Ben Brooks, R-Mobile, to give tax breaks to companies that write policies in high-risk areas did not fare as well in the Senate Banking and Insurance Committee.

Brooks' bill would effectively lower the amount of revenue flowing to the state General Fund budget.

Sen. Lowell Barron, D-Fyffe, said that Brooks has opposed Barron's effort to plow $1 billion from the Alabama Trust Fund over 10 years into road-building.

(Press-Register/John David Mercer)Sen. Ben Brooks, R-Mobile: "The General Fund has no right to profit off the misery in Mobile and Baldwin County."But Brooks "has got no reservations about -- for his own folks and special interests, which would be those folks there on the coast -- raiding the General Fund, which is $600 million in the red as we sit here and speak," Barron said. "You just can't have it both ways."

Brooks did not mince words in response.

"The General Fund has no right to profit off the misery in Mobile and Baldwin County," he said.

Barron and Sen. Roger Bedford, D-Russellville, said they did not want to vote on Brooks' bill until they got estimates of its impact on state budgets.

The tax credit would go to companies for every policy they write for a homeowner formerly insured by the state's insurer of last resort, the Alabama Insurance Underwriting Association, also called the beach pool.